The Men and Women Who Run Aberdeen Asset Management Plc

What you need to know about the top executives of fund manager Aberdeen Asset Management plc (LON:ADN).

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Management can make all the difference to a company’s success and thus its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I’m assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at Aberdeen Asset Management (LSE: ADN), the fund manager with an emerging market and Asia Pacific focus.

Here are the key directors:

Director Position
Roger Cornick (non exec) Chairman
Martin Gilbert Chief executive
Andrew Laing Deputy chief executive
Bill Rattray Finance director
Anne Richards Chief investment officer
Hugh Young MD, Asia and equities
Rod MacRae Head of risk

Roger Cornick has been chairman since 2009, but was a board member from 2004. He spent 20 years with Perpetual, before its merger with Invesco in 2000, ending as its deputy chairman.

Founder

Martin Gilbert co-founded Aberdeen as a start-up in 1983 and has been CEO for 27 years. The firm’s growth has been powered by acquisitions but has not been without upset: it nearly failed in the wake of the split cap scandal some 10 years ago and since had to claw its way back into the FTSE 100.

In parallel, Mr Gilbert was on the board of First Group from 1985 and its chairman from 1995, resigning in the face of investor ire when that company was forced to make an emergency rights issue earlier this year.

Succession

Having joked that he would leave Aberdeen when Sir Alex Ferguson left Manchester United, he has given no indication of his departure but sale of most of his multi-million pound holding in the company over the last two years suggests otherwise. 

Andrew Laing’s unusual position as deputy CEO complicates that matter. Is he an automatic replacement for the CEO? Otherwise, would it be tenable to have been Deputy CEO since 2008 and yet stay on the board if passed over in favour of an outsider? Mr Laing has a long history with the company, having joined in 1986 and becoming chief operating officer in 1987.

Long service

Bill Rattray is also a long-time company man, joining in 1985. A chartered accountant, he became finance director in 1991. 1985 also saw the arrival of Hugh Young to manage Aberdeen’s Asian equities. Subsequently based in Singapore he built up Aberdeen’s biggest business, but was only appointed to the board in 2011.

A relative newcomer, Anne Richards worked for Merrill Lynch Investment Management and subsequently Edinburgh Fund Managers where she was chief investment officer when it was acquired by Aberdeen in 2003. A chartered accountant, Rod McRae also joined on the acquisition of Edinburgh Fund Managers, where he was chief operating officer.

Aberdeen faced some strong shareholder opposition to its remuneration report in 2011 and again in the ‘shareholder spring’ of 2012.

Aberdeen’s seven non execs are overwhelmingly drawn from the investment management sector. That’s probably helpful in holding an entrenched management to account.

I analyse management teams from five different angles to help work out a verdict. Here’s my assessment:

   
1. Reputation. Management CVs and track record.
Good.
 

 Score 4/5

2. Performance. Success at the company.
Successful but not without mishap.
 

Score 4/5

3. Board Composition. Skills, experience, balance
Lack of fresh blood and succession issues.
 

 Score 2/5

4. Remuneration. Fairness of pay, link to performance.
Controversial.
 

 Score 2/5

5. Directors’ Holdings, compared to their pay.
Most execs have substantial holdings, but CEO no longer has.
 

 Score 2/5

Overall, Aberdeen scores 14 out of 25, a poor result. The company’s growth has been a remarkable success, but an entrenched management led by a CEO selling shares as if they are going out of fashion doesn’t inspire confidence in the board.

I’ve collated all my FTSE 100 boardroom verdicts on this summary page.

Buffett’s favourite FTSE share

Legendary investor Warren Buffett has always looked for impressive management teams when picking stocks. His recent acquisition, Heinz, has long had a reputation for strong management. Indeed Mr Buffett praised its “excellent management” alongside its high quality products and continuous innovation.

So it’s important to tell you about the FTSE 100 company in which the billionaire stock-picker has a substantial stake. A special free report from The Motley Fool — “The One UK Share Warren Buffett Loves” — explains Mr Buffett’s purchase and investing logic in full.

Mr Buffett rarely invests outside his native United States, which makes this British blue chip — and its management — all the more attractive. So why not download the report today? It’s totally free and comes with no further obligation.

> Tony does not own any shares mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

Investing Articles

At 17.7%, this energy stock has the highest dividend yield in the FTSE 350

This oil & gas enterprise has promised $500m worth of dividends in 2024 and 2025, pushing its yield to the…

Read more »

Investing Articles

This S&P 500 stock just hit $1 trillion! Which one will be next?

This often-overlooked semiconductor business just surpassed a $1trn market capitalisation as demand for its AI chips explodes to record highs!

Read more »

Investing Articles

Down 70% with a P/E of 3.5! Is this FTSE 250 stock on the verge of a MASSIVE comeback?

Motor finance lenders are getting a second chance in court that could avoid £30bn in penalties. Is this FTSE 250…

Read more »

Investing Articles

This FTSE 100 stock’s down 50% with a forward P/E of just 6.6! Is it a screaming buy for me?

This FTSE 100 homebuilder surged 40% during most of 2024 before crashing, creating what looks like a lucrative buying opportunity.…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Is Nvidia heading for the mother of all stock crashes in 2025?

After a seemingly unstoppable rise, is AI chipmaker Nvidia's stock going to suffer badly if the current AI boom cools…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Fancy a 13.9% dividend yield? Consider these dirt-cheap investment trusts!

These investment trusts are trading at whopping discounts to their net asset values (NAVs). Here's why they could prove to…

Read more »

Investing Articles

If the market shut down for 10 years, I’d be happy to hold these 2 FTSE 100 shares

Our writer reveals a pair of FTSE 100 shares that he reckons are well set up to deliver strong returns…

Read more »

Investing Articles

Surely, the Rolls-Royce share price can’t go any higher in 2025?

The Rolls-Royce share price was the best performer on the FTSE 100 in 2023 and so far in 2024. Dr…

Read more »